Tail risks — often associated with economic phenomena like the 2008 global financial crisis — involve catastrophic, but presumed unlikely, events at the far end of a bell curve of possible dangers. “Fat tail risks” are much more probable. Sometimes called “black swans,” they can cause devastating impacts very fast.
Climate change, we are beginning to realize, presents the ultimate fat tail risk. This includes risks to the stability of the world financial system and economy — through, for example, losing $1 trillion to $4 trillion of fossil fuel assets made unviable by stricter climate regulations and cheaper renewable energy. But the real stinger in the tail is the risk that self-reinforcing feedbacks could cause the Earth to warm itself beyond our control, pushing the climate past a series of deadly tipping points into Hothouse Earth.
One feedback concerns the white shield of Arctic sea ice that reflects solar radiation safely back to space. Half the ice is already gone. The remaining half contains only a few percent of the original strong sea ice that builds up over many years. The rest is fragile new ice that forms each winter. Thin and less reflective, it is also broken up more easily by wind and waves.
When all the ice vanishes — possibly within a decade or two — the extra heat absorbed by the open seas will cause additional warming equivalent to emitting a trillion tons of carbon dioxide on top of the 2.4 trillion that we’ve put into the atmosphere since the industrial revolution.
It’s a similar story with the Amazon rainforest, which has long absorbed carbon dioxide from the atmosphere. If we don’t stop felling it, we’ll soon reach the tipping point where a runaway reaction will destroy what remains, and with it much of Latin America’s climate system, with repercussions throughout the world.
The action needed to limit these risks is clear, if not necessarily easy.
First, we must cut carbon dioxide emissions by accelerating our shift from fossil fuels to clean energy as fast as possible, as the International Energy Agency warns. Though essential, aiming for net zero at 2050 will not provide any significant cooling in the first decade or two, since burning fossil fuels also emits reflective aerosols, primarily sulfates that are helping cool the planet. The net result appears to be a slight warming 10 years after fossil fuel emissions end, turning to slight cooling after 20 years, with more cooling in following decades.
Slowing global warming fast in the next crucial decade also means stopping destroying our forests and other “sinks” that draw down massive amounts of carbon dioxide and store it in trees, grasses and soils.
Next, we must cut the short-lived super climate pollutants — HFC refrigerants, methane (the main component of “natural” gas,) tropospheric ozone and black carbon soot. This could slash the rate of global warming by half, and by two-thirds in the Arctic, faster than any other strategy. We know how to do this — and we know it benefits not just the climate but health, productivity and food security, largely by reducing air pollution.
HFCs are already being phased down worldwide under the Kigali Amendment to the Montreal Protocol, potentially avoiding up to half a degree Celsius of warming by the end of the century.
The next target is methane: reducing it can cut warming even faster — by nearly 0.3 degrees by the 2040s — making this the most effective way to take the stinger out of the tail.
Methane can’t easily be shoe-horned into the Montreal Protocol, but the protocol demonstrates how to create a successful global agreement fast: just nine months elapsed from opening formal negotiations to concluding what is widely recognized as the world’s most successful environmental treaty.
We already understand the science of methane and the technologies to control emissions better than we understood stratospheric ozone before the Montreal Protocol negotiations began — thanks largely to the work of the Climate and Clean Air Coalition (CACC). Launched by then Secretary of State Hillary Clinton in 2012, it just published its Global Methane Assessment, confirming the huge benefits from mitigating near-term warming.
National and regional regulations, and even some useful voluntary measures, already exist: others are emerging. We can build on them to negotiate a new global agreement within a year or two. Acting that fast would require the world leaders at President Biden’s summit last month to truly appreciate the fat-tail risk we all face.
If we accelerate the shift to clean energy, stop destroying our carbon sinks, and cut methane through a new agreement, we’ll have a chance to win the 10-year sprint to 2030 and stay in the game long enough to decarbonize completely by 2050. But time is not on our side. If we don’t act fast, the stinger in the fat tail of climate change could prove deadly.
Durwood Zaelke is president of the Institute for Governance and Sustainable Development in Washington, D.C. and Paris, and adjunct professor at the University of California, Santa Barbara.
This piece had been updated.